Americans are paying much more for electric vehicles than they were just one year ago, squashing the hopes of those that were looking to ditch gas for good.
Electric vehicles now cost on average $54,000, which is 22% more than they would have cost at the same time last year according to JD Power. As more people are hoping to make the switch away from fossil-fuel-powered vehicles, this is another blow to the wallet, considering that electric vehicles were typically more expensive anyway.
It’s not just electric vehicles that have jumped up in price either, ICE-powered vehicles have also risen by 14% for an average price of $44,000, according to Wall Street Journal.
Automakers are still experiencing supply chain shortages and rising costs of materials, made worse by the war in Ukraine, The higher costs of manufacturing are being passed on to the consumer, leading to much higher average vehicle prices.
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The cost to build an electric vehicle is exponentially greater than a fossil-fuel-powered vehicle due to the need for rare earth metals such as lithium, nickel, and cobalt to make the battery packs. All of these materials have risen in cost by 140% according to Alix Partners, from $3,381 in March 2020 to $8,255 now.
The cost of gas is rising ever higher and is expected to crest over $6 per gallon this summer. Manufacturers have an uphill battle if they want electric vehicles to be adopted by the masses.
Searches for electric vehicles were up by 73% in January according to data from Kelley Blue Book and Autotrader, showing that people are seriously interested in making the switch, but it isn’t enough to be on par with ICE vehicles, EVs are going to have to be better in every way, and cheaper.